The Federal Reserve System :: essays research papers

The federal official modestness trunk was founded by copulation in 1913, it began to operate in Nov., 1914. Its setup, although somewhat altered since its establishment, particularly by the Banking Act of 1935, has remained substantially the same.StructureThe federal official arrest Act created 12 regional Federal Reserve rims, supervised by a Federal Reserve Board. Each reserve rely is the central bank for its district. The limit point lines of the districts were drawn in accordance with broad geographic patterns of business, and the banks were placed in Boston, New York City, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco. In addition some of the regional banks have unmatched or more branch banks attached to them.All national banks must(prenominal) belong to the system, and state banks may if they meet certain requirements. Member banks crap the bulk of the bewilders of all commercial banks in the count ry. Each particle bank is required to own hackneyed in the Federal Reserve bank of its district and must maintain legal reserves on deposit with the district reserve bank. The required reserves are proportionate to the member banks own deposits, the proportion varying according to the fix of the member bank and the character of its deposits.Each reserve bank is managed by a board of nine directors (three decreed by the Federal Reserve Board, six by the local member banks). The Federal Reserve Systems Board of Governors designates one of the federally appointed directors as chairman and Federal Reserve agent it is the chairmans duty to handle to the Board. The board of directors appoints the banks president and other officers and employees. The operations of the Federal Reserve banks, although not conducted primarily for profit, yield an income that is ordinarily sufficient to stay expenses, to pay a 6% cumulative dividend annually on the stock held by member banks, to make ad ditions to surplus, and to provide the U.S. Treasury with over $1 billion a year in revenue.The Board of Governors of the Federal Reserve Systemthe national supervisory agencyis composed of seven members appointed for 14-year terms by the President. Its offices are in Washington, D.C. The Federal Open grocery Committee, created later (1923) than the systems other divisions, comprises the seven members of the Board of Governors and quintette representatives of the Federal Reserve banks it directs the purchases and sales by the reserve banks of federal government securities and other obligations in the open market.